H.R. 1425 — what changed

added “(A) Applicable percentage—The applicable percentage for any taxable year shall be the percentage such that the applicable percentage for any taxpayer whose household income is within an income tier specified in the following table shall increase, on a sliding scale in a linear manner, from the initial premium percentage to the final premium percentage specified in such table for such income tier:”

added Section 1302(c)(4) of the Patient Protection and Affordable Care Act (42 U.S.C. 18022(c)(4)) is amended by striking “calendar year)” and inserting “calendar year, based on estimates and projections for the applicable calendar year of the percentage (if any) by which the average per enrollee premium for eligible employer-sponsored health plans (as defined in section 5000A(f)(2) of the Internal Revenue Code of 1986) exceeds such average per enrollee premium for the preceding calendar year, as published in the National Health Expenditure Accounts)”.

added “(i) Coverage must be affordable

added “(I) Employees—An employee shall not be treated as eligible for minimum essential coverage if such coverage consists of an eligible employer-sponsored plan (as defined in section 5000A(f)(2)) and the employee’s required contribution (within the meaning of section 5000A(e)(1)(B)) with respect to the plan exceeds 9.5 percent of the employee’s household income.

added “(II) Family members—An individual who is eligible to enroll in an eligible employer-sponsored plan (as defined in section 5000A(f)(2)) by reason of a relationship the individual bears to the employee shall not be treated as eligible for minimum essential coverage by reason of such eligibility to enroll if the employee’s required contribution (within the meaning of section 5000A(e)(1)(B), determined by substituting “family” for “self-only”) with respect to the plan exceeds 9.5 percent of the employee’s household income.”

added “(C) Exclusion of portion of lump-sum social security benefits

added “(i) In general—The term “modified adjusted gross income” shall not include so much of any lump-sum social security benefit payment as is attributable to months ending before the beginning of the taxable year.

added “(ii) Lump-sum social security benefit payment—For purposes of this subparagraph, the term “lump-sum social security benefit payment” means any payment of social security benefits (as defined in section 86(d)(1)) which constitutes more than 1 month of such benefits.

added “(iii) Election to include excludable amount—A taxpayer may elect (at such time and in such manner as the Secretary may provide) to have this subparagraph not apply for any taxable year.”

added “(6) Additional planning and establishment grants

added “(A) In general—There shall be appropriated to the Secretary, out of any moneys in the Treasury not otherwise appropriated, $200 million to award grants to eligible States for the uses described in paragraph (3).

added “(B) Duration and renewability—A grant awarded under subparagraph (A) shall be for a period of 2 years and may not be renewed.

added “(C) Limitation—A grant may not be awarded under subparagraph (A) after December 31, 2023.

added “(D) Eligible State defined—For purposes of this paragraph, the term eligible State means a State that, as of the date of the enactment of this paragraph, is not operating an Exchange (other than an Exchange described in section 155.200(f) of title 45, Code of Federal Regulations).”

added “(i) In general—In establishing an Exchange under this section (other than in establishing an Exchange pursuant to a grant awarded under subsection (a)(6))”

added “(ii) Additional planning and establishment grants—In establishing an Exchange pursuant to a grant awarded under subsection (a)(6), the State shall ensure that such Exchange is self-sustaining beginning on January 1, 2025, including allowing the Exchange to charge assessments or user fees to participating health insurance issuers, or to otherwise generate funding, to support its operations.”

added “(3) Clarification—This subsection shall not apply in the case of a State that elects to apply the requirements described in subsection (a) and satisfies the requirement described in subsection (b) on or after January 1, 2014.”

added Subtitle D of title I of the Patient Protection and Affordable Care Act is amended by inserting after part 5 (42 U.S.C. 18061 et seq.) the following new part:

added “6 Improve Health Insurance Affordability Fund

added “1351. Establishment of program

added “There is hereby established the “Improve Health Insurance Affordability Fund” to be administered by the Secretary of Health and Human Services, acting through the Administrator of the Centers for Medicare & Medicaid Services (in this section referred to as the “Administrator”), to provide funding, in accordance with this part, to the 50 States and the District of Columbia (each referred to in this section as a “State”) beginning on January 1, 2022, for the purposes described in section 1352.

added “1352. Use of funds

added “(a) In general—A State shall use the funds allocated to the State under this part for one of the following purposes:

added “(1) To provide reinsurance payments to health insurance issuers with respect to individuals enrolled under individual health insurance coverage (other than through a plan described in subsection (b)) offered by such issuers.

added “(2) To provide assistance (other than through payments described in paragraph (1)) to reduce out-of-pocket costs, such as copayments, coinsurance, premiums, and deductibles, of individuals enrolled under qualified health plans offered on the individual market through an Exchange.

added “(b) Exclusion of certain grandfathered and transitional plans—For purposes of subsection (a), a plan described in this subsection is the following:

added “(1) A grandfathered health plan (as defined in section 1251).

added “(2) A plan (commonly referred to as a “transitional plan”) continued under the letter issued by the Centers for Medicare & Medicaid Services on November 14, 2013, to the State Insurance Commissioners outlining a transitional policy for coverage in the individual and small group markets to which section 1251 does not apply, and under the extension of the transitional policy for such coverage set forth in the Insurance Standards Bulletin Series guidance issued by the Centers for Medicare & Medicaid Services on March 5, 2014, February 29, 2016, February 13, 2017, April 9, 2018, March 25, 2019, and January 31, 2020, or under any subsequent extensions thereof.

added “(3) Student health insurance coverage (as defined in section 147.145 of title 45, Code of Federal Regulations).

added “1353. State eligibility and approval; Default safeguard

added “(a) Encouraging State options for allocations

added “(1) In general—To be eligible for an allocation of funds under this part for a year (beginning with 2022), a State shall submit to the Administrator an application at such time (but, in the case of allocations for 2022, not later than 90 days after the date of the enactment of this part and, in the case of allocations for a subsequent year, not later than March 1 of the previous year) and in such form and manner as specified by the Administrator containing—

added “(A) a description of how the funds will be used; and

added “(B) such other information as the Administrator may require.

added “(2) Automatic approval—An application so submitted is approved unless the Administrator notifies the State submitting the application, not later than 60 days after the date of the submission of such application, that the application has been denied for not being in compliance with any requirement of this part and of the reason for such denial.

added “(3) 5-year application approval—If an application of a State is approved for a purpose described in section 1352 for a year, such application shall be treated as approved for such purpose for each of the subsequent 4 years.

added “(4) Revocation of approval—The approval of an application of a State, with respect to a purpose described in section 1352, may be revoked if the State fails to use funds provided to the State under this section for such purpose or otherwise fails to comply with the requirements of this section.

added “(b) Default Federal safeguard

added “(1) 2022—For 2022, in the case of a State that does not submit an application under subsection (a) by the 90-day submission date applicable to such year under subsection (a)(1) and in the case of a State that does submit such an application by such date that is not approved, the Administrator, in consultation with the State insurance commissioner, shall, from the amount calculated under paragraph (4) for such year, carry out the purpose described in paragraph (3) in such State for such year.

added “(2) 2023 and subsequent years—For 2023 or a subsequent year, in the case of a State that does not have in effect an approved application under this section for such year, the Administrator, in consultation with the State insurance commissioner, shall, from the amount calculated under paragraph (4) for such year, carry out the purpose described in paragraph (3) in such State for such year.

added “(3) Specified use—The amount described in paragraph (4), with respect to 2022 or a subsequent year, shall be used to carry out the purpose described in section 1352(a)(1) in each State described in paragraph (1) or (2) for such year, as applicable, by providing reinsurance payments to health insurance issuers with respect to attachment range claims (as defined in section 1354(b)(2)), using the dollar amounts specified in subparagraph (B) of such section for such year) in an amount equal to, subject to paragraph (5), the percentage (specified for such year by the Secretary under such subparagraph) of the amount of such claims.

added “(4) Amount described—The amount described in this paragraph, with respect to 2022 or a subsequent year, is the amount equal to the total sum of amounts that the Secretary would otherwise estimate under section 1354(b)(2)(A)(i) for such year for each State described in paragraph (1) or (2) for such year, as applicable, if each such State were not so described for such year.

added “(5) Adjustment—For purposes of this subsection, the Secretary may apply a percentage under paragraph (3) with respect to a year that is less than the percentage otherwise specified in section 1354(b)(2)(B) for such year, if the cost of paying the total eligible attachment range claims for States described in this subsection for such year at such percentage otherwise specified would exceed the amount calculated under paragraph (4) for such year.

added “1354. Allocations

added “(a) Appropriation—For the purpose of providing allocations for States under subsection (b) and payments under section 1353(b) there is appropriated, out of any money in the Treasury not otherwise appropriated, $10,000,000,000 for 2022 and each subsequent year.

added “(b) Allocations

added “(1) Payment

added “(A) In general—From amounts appropriated under subsection (a) for a year, the Secretary shall, with respect to a State not described in section 1353(b) for such year and not later than the date specified under subparagraph (B) for such year, allocate for such State the amount determined for such State and year under paragraph (2).

added “(B) Specified date—For purposes of subparagraph (A), the date specified in this subparagraph is—

added “(i) for 2022, the date that is 45 days after the date of the enactment of this part; and

added “(ii) for 2023 or a subsequent year, January 1 of the respective year.

added “(C) Notifications of allocation amounts—For 2023 and each subsequent year, the Secretary shall notify each State of the amount determined for such State under paragraph (2) for such year by not later than January 1 of the previous year.

added “(2) Allocation amount determinations

added “(A) In general—For purposes of paragraph (1), the amount determined under this paragraph for a year for a State described in paragraph (1)(A) for such year is the amount equal to—

added “(i) the amount that the Secretary estimates would be expended under this part for such year on attachment range claims of individuals residing in such State if such State used such funds only for the purpose described in paragraph (1) of section 1352(a) at the dollar amounts and percentage specified under subparagraph (B) for such year; minus

added “(ii) the amount, if any, by which the Secretary determines—

added “(I) the estimated amount of premium tax credits under section 36B of the Internal Revenue Code of 1986 that would be attributable to individuals residing in such State for such year without application of this part; exceeds

added “(II) the estimated amount of premium tax credits under section 36B of the Internal Revenue Code of 1986 that would be attributable to individuals residing in such State for such year if such State were a State described in section 1353(b) for such year.

added “(B) Specifications—For purposes of subparagraph (A) and section 1353(b)(3), the Secretary shall determine the dollar amounts and the percentage to be specified under this subparagraph for a year in a manner to ensure that the total amount of expenditures under this part for such year is estimated to equal the total amount appropriated for such year under subsection (a) if such expenditures were used solely for the purpose described in paragraph (1) of section 1352(a) for attachment range claims at the dollar amounts and percentage so specified for such year.

added “(3) Availability—Funds allocated to a State under this subsection for a year shall remain available through the end of the subsequent year.”

added “(4) Outreach and educational activities

added “(A) In general—In the case of an Exchange established or operated by the Secretary within a State pursuant to this subsection, the Secretary shall carry out outreach and educational activities for purposes of informing individuals about qualified health plans offered through the Exchange, including by informing such individuals of the availability of coverage under such plans and financial assistance for coverage under such plans. Such outreach and educational activities shall be provided in a manner that is culturally and linguistically appropriate to the needs of the populations being served by the Exchange (including hard-to-reach populations, such as racial and sexual minorities, limited English proficient populations, individuals in rural areas, veterans, and young adults) and shall be provided to populations residing in high health disparity areas (as defined in subparagraph (E)) served by the Exchange, in addition to other populations served by the Exchange.

added “(B) Limitation on use of funds—No funds appropriated under this paragraph shall be used for expenditures for promoting non-ACA compliant health insurance coverage.

added “(C) Non-aca compliant health insurance coverage—For purposes of subparagraph (B):

added “(i) The term non-ACA compliant health insurance coverage means health insurance coverage, or a group health plan, that is not a qualified health plan.

added “(ii) Such term includes the following:

added “(I) An association health plan.

added “(II) Short-term limited duration insurance.

added “(D) Funding—Out of any funds in the Treasury not otherwise appropriated, there are hereby appropriated for fiscal year 2022 and each subsequent fiscal year, $100,000,000 to carry out this paragraph. Funds appropriated under this subparagraph shall remain available until expended.

added “(E) High health disparity area defined—For purposes of subparagraph (A), the term “high health disparity area” means a contiguous geographic area that—

added “(i) is located in one census tract or ZIP code;

added “(ii) has measurable and documented racial, ethnic, or geographic health disparities;

added “(iii) has a low-income population, as demonstrated by—

added “(I) average income below 138 percent of the Federal poverty line; or

added “(II) a rate of participation in the special supplemental nutrition program under section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786) that is higher than the national average rate of participation in such program;

added “(iv) has poor health outcomes, as demonstrated by—

added “(I) lower life expectancy than the national average; or

added “(II) a higher percentage of instances of low birth weight than the national average; and

added “(v) is part of a Metropolitan Statistical Area identified by the Office of Management and Budget.

added “(5) Annual enrollment targets—For plan year 2021 and each subsequent plan year, in the case of an Exchange established or operated by the Secretary within a State pursuant to this subsection, the Secretary shall establish annual enrollment targets for such Exchange for such year.”

added Not later than 1 year after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a report examining whether the Department of Health and Human Services has been conducting maintenance on the website commonly referred to as “Healthcare.gov” during annual open enrollment periods (as described in section 1311(c)(6)(B) of the Patient Protection and Affordable Care Act (42 U.S.C. 18031(c)(6)(B)) in such a manner so as to minimize any disruption to the use of such website resulting from such maintenance.

added “(C) Selection of recipients—In the case of an Exchange established and operated by the Secretary within a State pursuant to section 1321(c), in awarding grants under paragraph (1), the Exchange shall—

added “(i) select entities to receive such grants based on an entity’s demonstrated capacity to carry out each of the duties specified in paragraph (3);

added “(ii) not take into account whether or not the entity has demonstrated how the entity will provide information to individuals relating to group health plans offered by a group or association of employers described in section 2510.3–5(b) of title 29, Code of Federal Regulations (or any successor regulation), or short-term limited duration insurance (as defined by the Secretary for purposes of section 2791(b)(5) of the Public Health Service Act); and

added “(iii) ensure that, each year, the Exchange awards such a grant to—

added “(I) at least one entity described in this paragraph that is a community and consumer-focused nonprofit group; and

added “(II) at least one entity described in subparagraph (B), which may include another community and consumer-focused nonprofit group in addition to any such group awarded a grant pursuant to subclause (I).”

added “(C) facilitate enrollment, including with respect to individuals with limited English proficiency and individuals with chronic illnesses, in qualified health plans, State medicaid plans under title XIX of the Social Security Act, and State child health plans under title XXI of such Act;”

added “(F) provide referrals to community-based organizations that address social needs related to health outcomes.”

added “(iii) maintain physical presence in the State of the Exchange so as to allow in-person assistance to consumers; and

added “(iv) receive opioid specific education and training that ensures the navigator can best educate individuals on qualified health plans offered through an Exchange, specifically coverage under such plans for opioid health care treatment.”

added “(A) State Exchanges—Grants under”

added “(B) Federal Exchanges—For purposes of carrying out this subsection, with respect to an Exchange established and operated by the Secretary within a State pursuant to section 1321(c), the Secretary shall obligate $100,000,000 out of amounts collected through the user fees on participating health insurance issuers pursuant to section 156.50 of title 45, Code of Federal Regulations (or any successor regulations), for fiscal year 2022 and each subsequent fiscal year. Such amount for a fiscal year shall remain available until expended.”

added “(8) Network adequacy standards

added “(A) Certain Exchanges—In the case of an Exchange operated by the Secretary pursuant section 1321(c)(1) or an Exchange described in section 155.200(f) of title 42, Code of Federal Regulations (or a successor regulation), the Exchange shall require each qualified health plan offered through such Exchange to meet such quantitative network adequacy standards as the Secretary may prescribe for purposes of this subparagraph.

added “(B) State Exchanges—In the case of an Exchange not described in subparagraph (A), the Exchange shall establish quantitative network adequacy standards with respect to qualified health plans offered through such Exchange and require such plans to meet such standards.”

added “(e) Protection from excessive, unjustified, or unfairly discriminatory rates

added “(1) Authority of States—Nothing in this section shall be construed to prohibit a State from imposing requirements (including requirements relating to rate review standards and procedures and information reporting) on health insurance issuers with respect to rates that are in addition to the requirements of this section and are more protective of consumers than such requirements.

added “(2) Consultation in rate review process—In carrying out this section, the Secretary shall consult with the National Association of Insurance Commissioners and consumer groups.

added “(3) Determination of who conducts reviews for each State—The Secretary shall determine, after the date of enactment of this section and periodically thereafter, the following:

added “(A) In which markets in each State the State insurance commissioner or relevant State regulator shall undertake the corrective actions under paragraph (4), based on the Secretary’s determination that the State regulator is adequately undertaking and utilizing such actions in that market.

added “(B) In which markets in each State the Secretary shall undertake the corrective actions under paragraph (4), in cooperation with the relevant State insurance commissioner or State regulator, based on the Secretary’s determination that the State is not adequately undertaking and utilizing such actions in that market.

added “(4) Corrective action for excessive, unjustified, or unfairly discriminatory rates—In accordance with the process established under this section, the Secretary or the relevant State insurance commissioner or State regulator shall take corrective actions to ensure that any excessive, unjustified, or unfairly discriminatory rates are corrected prior to implementation, or as soon as possible thereafter, through mechanisms such as—

added “(A) denying rates;

added “(B) modifying rates; or

added “(C) requiring rebates to consumers.

added “(5) Noncompliance—Failure to comply with any corrective action taken by the Secretary under this subsection may result in the application of civil monetary penalties under section 2723 and, if the Secretary determines appropriate, make the plan involved ineligible for classification as a qualified health plan.”

added “(v) Section 2794 (relating to reasonableness of rates with respect to health insurance coverage).”

added “(12) 12-month continuous enrollment—Notwithstanding any other provision of this title, a State plan approved under this title (or under any waiver of such plan approved pursuant to section 1115 or section 1915), shall provide that an individual who is determined to be eligible for benefits under such plan (or waiver) shall remain eligible and enrolled for such benefits through the end of the month in which the 12-month period (beginning on the date of determination of eligibility) ends.”

added “(6) Requirement for 12-month continuous enrollment—Notwithstanding any other provision of this title, a State child health plan that provides child health assistance under this title through a means other than described in section 2101(a)(2), shall provide that an individual who is determined to be eligible for benefits under such plan shall remain eligible and enrolled for such benefits through the end of the month in which the 12-month period (beginning on the date of determination of eligibility) ends.”

added “(5) Any woman who is eligible for medical assistance under the State plan or a waiver of such plan and who is, or who while so eligible becomes, pregnant, shall continue to be eligible under the plan or waiver for medical assistance through the end of the month in which the 365-day period (beginning on the last day of her pregnancy) ends, regardless of the basis for the woman's eligibility for medical assistance, including if the woman's eligibility for medical assistance is on the basis of being pregnant.”

added “(H) Section 1902(e)(5) (requiring 365-day continuous coverage for pregnant and postpartum women).”

added “(qq) Maintenance of effort related to low-Income pregnant women—For calendar quarters beginning on or after the effective date described in section 203(d) of the Patient Protection and Affordable Care Enhancement Act, and before January 1, 2023, no Federal payment shall be made to a State under section 1903(a) for amounts expended under a State plan under this title or a waiver of such plan if the State—

added “(1) has in effect under such plan eligibility standards, methodologies, or procedures for individuals described in subsection (l)(1) who are eligible for medical assistance under the State plan or waiver under subsection (a)(10)(A)(ii)(IX) that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, for such individuals under such plan or waiver that are in effect on the date of the enactment of this subsection; or

added “(2) provides medical assistance to individuals described in subsection (l)(1) who are eligible for medical assistance under such plan or waiver under subsection (a)(10)(A)(ii)(IX) at a level that is less than the level at which the State provides such assistance to such individuals under such plan or waiver on the date of the enactment of this subsection.”

added “(g) Maintenance of effort—For calendar quarters beginning on or after the effective date described in section 203(d) of the Patient Protection and Affordable Care Enhancement Act, and before January 1, 2023, no payment may be made under section 2105(a) with respect to a State child health plan if the State—

added “(1) has in effect under such plan eligibility standards, methodologies, or procedures for targeted low-income pregnant women that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan that are in effect on the date of the enactment of this subsection; or

added “(2) provides pregnancy-related assistance to targeted low-income pregnant women under such plan at a level that is less than the level at which the State provides such assistance to such women under such plan on the date of the enactment of this subsection.”

added Section 1903 of the Social Security Act (42 U.S.C. 1396b) is amended—

added “(bb) Reduction of Federal payments for certain administrative costs of nonexpansion States

added “(1) In general—In the case of a State that does not provide under the State plan of such State (or waiver of such plan) for making medical assistance available in accordance with section 1902(k)(1) to all individuals described in section 1902(a)(10)(i)(VIII) for a calendar quarter beginning on or after October 1, 2022, the Secretary may reduce the percentage specified in subsection (a)(7) for amounts described in such subsection expended during such quarter by such State by the number of percentage points specified in paragraph (2) for such quarter.

added “(2) Amount of reduction—For purposes of paragraph (1), the number of percentage points specified in this paragraph for a calendar quarter is the following:

added “(A) For the calendar quarter beginning on October 1, 2022, 0.5.

added “(B) For a calendar quarter beginning on or after January 1, 2023, and ending before July 1, 2027, the number of percentage points specified under this paragraph for the previous quarter, plus 0.5.

added “(C) For a calendar quarter beginning on or after July 1, 2027, 10.

added “(3) Definition—For purposes of this subsection, the term “State” means a State that is one of the 50 States or the District of Columbia.”

added Section 1903 of the Social Security Act (42 U.S.C. 1396b), as amended by section 204, is further amended—

added “(cc) Reduction of Federal payments for certain administrative costs of nonexpansion States that do not satisfy reporting requirements

added “(1) In general

added “(A) Reduction—In the case of a nonexpansion State, with respect to a fiscal year (beginning with fiscal year 2023) that does not satisfy the reporting requirement under paragraph (2) for such fiscal year, the percentage specified in subsection (a)(7) for amounts described in such subsection expended by such State during a calendar quarter described in paragraph (4) with respect to such fiscal year, subject to subparagraph (B), shall be reduced by the number of percentage points specified in paragraph (4) for the respective calendar quarter.

added “(B) Exception—In the case of a nonexpansion State that is subject to a reduction under subparagraph (A) for the calendar quarter described in paragraph (4)(A) with respect to a fiscal year, if the State satisfies the criteria described in subparagraphs (A), (B), and (C) of paragraph (2) (without regard to the dates specified in such subparagraph (A) and (C)) before the beginning of a subsequent calendar quarter described in paragraph (4) with respect to such fiscal year, then such State shall not be subject to a reduction under subparagraph (A) for such subsequent calendar quarter.

added “(2) Reporting requirement—For purposes of paragraph (1), a nonexpansion State satisfies the reporting requirement under this paragraph for a fiscal year, if the nonexpansion State—

added “(A) by not later than January 1 of such year, posts on the public website of the State agency administering the State plan, the information described in paragraph (3) with respect to such State for the previous year;

added “(B) provides for at least a 30-day period for notice and comment on such information; and

added “(C) by not later than March 1 of such year, submits to the Secretary a complete report including such information, comments submitted pursuant to subparagraph (B), and a response by the State to each such comment.

added “(3) Information described—The information described in this paragraph, with respect to a State and year, is the following:

added “(A) The the estimated number of individuals who were uninsured for at least 6 months, shown by age-groups of 0 to 18 years of age and of 19 years of age to 64 years of age, as well as a detailed description of the basis for the estimates.

added “(B) The estimated number of the individuals estimated under subparagraph (A) in the State who would be eligible for medical assistance under the State plan if the State were to make medical assistance under the State plan available in accordance with section 1902(k)(1) to all individuals described in section 1902(a)(10)(i)(VIII), and a detailed description of the basis for the estimates.

added “(C) A comprehensive listing of State income eligibility criteria for all mandatory and optional Medicaid eligibility groups for which the State plan provides medical assistance (other than with respect to individuals described in clause (i)(II), (ii)(VI), or (ii)(XXII) of section 1902(a)(10)(A)).

added “(D) The total amount of hospital uncompensated-care costs and a breakdown of the source of such costs, as well as a breakdown for rural and non-rural hospitals.

added “(4) Percentage described—For purposes of paragraph (1), a calendar quarter described in this paragraph, with respect to a fiscal year, and the percentage points described in this paragraph for such quarter, with respect to a State, are—

added “(A) for the calendar quarter beginning on the April 1 occurring during such fiscal year, 0.5 percentage points;

added “(B) for the calendar quarter beginning on the July 1 occurring during such fiscal year, 1.0 percentage point; and

added “(C) for the calendar quarter beginning on the October 1 occurring during the subsequent fiscal year, 1.5 percentage points.

added “(5) Payment in case of reporting State—The expenses incurred by a non-expansion State, with respect to any calendar quarter with respect to a fiscal year (beginning with 2021), for carrying out subparagraphs (A) through (C) of paragraph (2) shall, for purposes of section 1903(a)(7), be considered to be expenses necessary for the proper and efficient administration of the State plan under this title.

added “(6) Nonexpanion State defined—For purposes of this subsection, the term “nonexpansion State” means, with respect to a fiscal year, a State that as of the first quarter of such fiscal year does not provide under the State plan of such State (or waiver of such plan) for making medical assistance available in accordance with section 1902(k)(1) to all individuals described in section 1902(a)(10)(i)(VIII).”

added “(C) payment for primary care services (as defined in subsection (jj)) at a rate that is not less than 100 percent of the payment rate that applies to such services and physician under part B of title XVIII (or, if greater, the payment rate that would be applicable under such part if the conversion factor under section 1848(d) for the year involved were the conversion factor under such section for 2009), and that is not less than the rate that would otherwise apply to such services under this title if the rate were determined without regard to this subparagraph, and that are—

added “(i) furnished during 2013 and 2014, by a physician with a primary specialty designation of family medicine, general internal medicine, or pediatric medicine; or

added “(ii) furnished during the period that begins on the first day of the first month that begins one year after the date of enactment of the Patient Protection and Affordable Care Enhancement Act and ends September 30, 2024—

added “(I) by a physician with a primary specialty designation of family medicine, general internal medicine, or pediatric medicine, but only if the physician self-attests that the physician is Board certified in family medicine, general internal medicine, or pediatric medicine;

added “(II) by a physician with a primary specialty designation of obstetrics and gynecology, but only if the physician self-attests that the physician is Board certified in obstetrics and gynecology;

added “(III) by an advanced practice clinician, as defined by the Secretary, that works under the supervision of—

added “(aa) a physician that satisfies the criteria specified in subclause (I) or (II); or

added “(bb) a nurse practitioner or a physician assistant (as such terms are defined in section 1861(aa)(5)(A)) who is working in accordance with State law, or a certified nurse-midwife (as defined in section 1861(gg)) who is working in accordance with State law;

added “(IV) by a rural health clinic, Federally-qualified health center, or other health clinic that receives reimbursement on a fee schedule applicable to a physician, a nurse practitioner or a physician assistant (as such terms are defined in section 1861(aa)(5)(A)) who is working in accordance with State law, or a certified nurse-midwife (as defined in section 1861(gg)) who is working in accordance with State law, for services furnished by a physician, nurse practitioner, physician assistant, or certified nurse-midwife, or services furnished by an advanced practice clinician supervised by a physician described in subclause (I)(aa) or (II)(aa), another advanced practice clinician, or a certified nurse-midwife; or

added “(V) by a nurse practitioner or a physician assistant (as such terms are defined in section 1861(aa)(5)(A)) who is working in accordance with State law, or a certified nurse-midwife (as defined in section 1861(gg)) who is working in accordance with State law, in accordance with procedures that ensure that the portion of the payment for such services that the nurse practitioner, physician assistant, or certified nurse-midwife is paid is not less than the amount that the nurse practitioner, physician assistant, or certified nurse-midwife would be paid if the services were provided under part B of title XVIII;”

added “(1) In general—Notwithstanding”

added “(2) Additional period—For purposes of paragraph (1), the additional period specified in this paragraph is the period that begins on the first day of the first month that begins one year after the date of enactment of the Patient Protection and Affordable Care Enhancement Act.”

added “(1) In general—For purposes of”

added “(2) Exclusions—Such term does not include any services described in subparagraph (A) or (B) of paragraph (1) if such services are provided in an emergency department of a hospital.”

added “(xiv) such contract provides that (I) payments to providers specified in section 1902(a)(13)(C) for primary care services defined in section 1902(jj) that are furnished during a year or period specified in section 1902(a)(13)(C) and section 1905(dd) are at least equal to the amounts set forth and required by the Secretary by regulation, (II) the entity shall, upon request, provide documentation to the State, sufficient to enable the State and the Secretary to ensure compliance with subclause (I), and (III) the Secretary shall approve payments described in subclause (I) that are furnished through an agreed upon capitation, partial capitation, or other value-based payment arrangement if the capitation, partial capitation, or other value-based payment arrangement is based on a reasonable methodology and the entity provides documentation to the State sufficient to enable the State and the Secretary to ensure compliance with subclause (I).”

added “(27) for each fiscal year beginning with fiscal year 2024, such sums as are necessary to fund allotments to States under subsections (c) and (m).”

added “(28) for fiscal year 2027 and each subsequent year, such sums as are necessary to fund allotments to States under subsections (c) and (m).”

added “(E) for fiscal year 2028, $15,000,000 for the purpose of carrying out this section (other than subsections (e), (f), and (g)); and

added “(F) for a subsequent fiscal year, the amount appropriated under this paragraph for the previous fiscal year, increased by the percentage increase in the consumer price index for all urban consumers (all items; United States city average) over such previous fiscal year, for the purpose of carrying out this section (other than subsections (e), (f), and (g)).”

added Section 2110(b)(1)(B)(ii) of the Social Security Act (42 U.S.C. 1397jj(b)(1)(B)(ii)) is amended—

added “(IV) at the option of the State, whose family income exceeds the maximum income level otherwise established for children under the State child health plan as of the date of the enactment of this subclause; and”

added “(G) Medicaid exception for citizens of Freely Associated States—With respect to eligibility for benefits for the designated Federal program defined in paragraph (3)(C) (relating to the Medicaid program), section 401(a) and paragraph (1) shall not apply to any individual who lawfully resides in 1 of the 50 States or the District of Columbia in accordance with the Compacts of Free Association between the Government of the United States and the Governments of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau and shall not apply, at the option of the Governor of Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, or American Samoa as communicated to the Secretary of Health and Human Services in writing, to any individual who lawfully resides in the respective territory in accordance with such Compacts.”

added “(3) an individual described in section 402(b)(2)(G), but only with respect to the designated Federal program defined in section 402(b)(3)(C).”

added “(8) an individual who lawfully resides in the United States in accordance with a Compact of Free Association referred to in section 402(b)(2)(G), but only with respect to the designated Federal program defined in section 402(b)(3)(C) (relating to the Medicaid program).”

added “(X) who are described in section 402(b)(2)(G) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and eligible for benefits under this title by reason of application of such section;”

added “(i) Exclusion of medical assistance expenditures for citizens of Freely Associated States—Expenditures for medical assistance provided to an individual described in section 431(b)(8) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1641(b)(8)) shall not be taken into account for purposes of applying payment limits under subsections (f) and (g).”

added “(9) clinic services furnished by or under the direction of a physician, without regard to whether the clinic itself is administered by a physician, including—

added “(A) such services furnished outside the clinic by clinic personnel to an eligible individual who does not reside in a permanent dwelling or does not have a fixed home or mailing address; and

added “(B) such services provided outside the clinic on the basis of a referral from a clinic administered by an Indian Health Program (as defined in paragraph (12) of section 4 of the Indian Health Care Improvement Act, or an Urban Indian Organization as defined in paragraph (29) of section 4 of such Act that has a grant or contract with the Indian Health Service under title V of such Act;”

added “E Fair Price Negotiation Program to Lower Prices for Certain High-Priced Single Source Drugs

added “1191. Establishment of program

added “(a) In general—The Secretary shall establish a Fair Price Negotiation Program (in this part referred to as the “program”). Under the program, with respect to each price applicability period, the Secretary shall—

added “(1) publish a list of selected drugs in accordance with section 1192;

added “(2) enter into agreements with manufacturers of selected drugs with respect to such period, in accordance with section 1193;

added “(3) negotiate and, if applicable, renegotiate maximum fair prices for such selected drugs, in accordance with section 1194; and

added “(4) carry out the administrative duties described in section 1196.

added “(b) Definitions relating to timing—For purposes of this part:

added “(1) Initial price applicability year—The term initial price applicability year means a plan year (beginning with plan year 2023) or, if agreed to in an agreement under section 1193 by the Secretary and manufacturer involved, a period of more than one plan year (beginning on or after January 1, 2023).

added “(2) Price applicability period—The term price applicability period means, with respect to a drug, the period beginning with the initial price applicability year with respect to which such drug is a selected drug and ending with the last plan year during which the drug is a selected drug.

added “(3) Selected drug publication date—The term selected drug publication date means, with respect to each initial price applicability year, April 15 of the plan year that begins 2 years prior to such year.

added “(4) Voluntary negotiation period—The term voluntary negotiation period means, with respect to an initial price applicability year with respect to a selected drug, the period—

added “(A) beginning on the sooner of—

added “(i) the date on which the manufacturer of the drug and the Secretary enter into an agreement under section 1193 with respect to such drug; or

added “(ii) June 15 following the selected drug publication date with respect to such selected drug; and

added “(B) ending on March 31 of the year that begins one year prior to the initial price applicability year.

added “(c) Other definitions—For purposes of this part:

added “(1) Fair price eligible individual—The term fair price eligible individual means, with respect to a selected drug—

added “(A) in the case such drug is furnished or dispensed to the individual at a pharmacy or by a mail order service—

added “(i) an individual who is enrolled under a prescription drug plan under part D of title XVIII or an MA–PD plan under part C of such title if coverage is provided under such plan for such selected drug; and

added “(ii) an individual who is enrolled under a group health plan or health insurance coverage offered in the group or individual market (as such terms are defined in section 2791 of the Public Health Service Act) with respect to which there is in effect an agreement with the Secretary under section 1197 with respect to such selected drug as so furnished or dispensed; and

added “(B) in the case such drug is furnished or administered to the individual by a hospital, physician, or other provider of services or supplier—

added “(i) an individual who is entitled to benefits under part A of title XVIII or enrolled under part B of such title if such selected drug is covered under the respective part; and

added “(ii) an individual who is enrolled under a group health plan or health insurance coverage offered in the group or individual market (as such terms are defined in section 2791 of the Public Health Service Act) with respect to which there is in effect an agreement with the Secretary under section 1197 with respect to such selected drug as so furnished or administered.

added “(2) Maximum fair price—The term maximum fair price means, with respect to a plan year during a price applicability period and with respect to a selected drug (as defined in section 1192(c)) with respect to such period, the price published pursuant to section 1195 in the Federal Register for such drug and year.

added “(3) Average international market price defined

added “(A) In general—The terms average international market price and AIM price mean, with respect to a drug, the average price (which shall be the net average price, if practicable, and volume-weighted, if practicable) for a unit (as defined in paragraph (4)) of the drug for sales of such drug (calculated across different dosage forms and strengths of the drug and not based on the specific formulation or package size or package type), as computed (as of the date of publication of such drug as a selected drug under section 1192(a)) in all countries described in clause (ii) of subparagraph (B) that are applicable countries (as described in clause (i) of such subparagraph) with respect to such drug.

added “(B) Applicable countries

added “(i) In general—For purposes of subparagraph (A), a country described in clause (ii) is an applicable country described in this clause with respect to a drug if there is available an average price for any unit for the drug for sales of such drug in such country.

added “(ii) Countries described—For purposes of this paragraph, the following are countries described in this clause:

added “(I) Australia.

added “(II) Canada.

added “(III) France.

added “(IV) Germany.

added “(V) Japan.

added “(VI) The United Kingdom.

added “(4) Unit—The term unit means, with respect to a drug, the lowest identifiable quantity (such as a capsule or tablet, milligram of molecules, or grams) of the drug that is dispensed.

added “1192. Selection of negotiation-eligible drugs as selected drugs

added “(a) In general—Not later than the selected drug publication date with respect to an initial price applicability year, subject to subsection (h), the Secretary shall select and publish in the Federal Register a list of—

added “(1)

added “(A) with respect to an initial price applicability year during 2023, at least 25 negotiation-eligible drugs described in subparagraphs (A) and (B), but not subparagraph (C), of subsection (d)(1) (or, with respect to an initial price applicability year during such period beginning after 2023, the maximum number (if such number is less than 25) of such negotiation-eligible drugs for the year) with respect to such year; and

added “(B) with respect to an initial price applicability year during 2024 or a subsequent year, at least 50 negotiation-eligible drugs described in subparagraphs (A) and (B), but not subparagraph (C), of subsection (d)(1) (or, with respect to an initial price applicability year during such period, the maximum number (if such number is less than 50) of such negotiation-eligible drugs for the year) with respect to such year;

added “(2) all negotiation-eligible drugs described in subparagraph (C) of such subsection with respect to such year; and

added “(3) all new-entrant negotiation-eligible drugs (as defined in subsection (g)(1)) with respect to such year.

added “(b) Selection of drugs—In carrying out subsection (a)(1) the Secretary shall select for inclusion on the published list described in subsection (a) with respect to a price applicability period, the negotiation-eligible drugs that the Secretary projects will result in the greatest savings to the Federal Government or fair price eligible individuals during the price applicability period. In making this projection of savings for drugs for which there is an AIM price for a price applicability period, the savings shall be projected across different dosage forms and strengths of the drugs and not based on the specific formulation or package size or package type of the drugs, taking into consideration both the volume of drugs for which payment is made, to the extent such data is available, and the amount by which the net price for the drugs exceeds the AIM price for the drugs.

added “(c) Selected drug—For purposes of this part, each drug included on the list published under subsection (a) with respect to an initial price applicability year shall be referred to as a “selected drug” with respect to such year and each subsequent plan year beginning before the first plan year beginning after the date on which the Secretary determines two or more drug products—

added “(1) are approved or licensed (as applicable)—

added “(A) under section 505(j) of the Federal Food, Drug, and Cosmetic Act using such drug as the listed drug; or

added “(B) under section 351(k) of the Public Health Service Act using such drug as the reference product; and

added “(2) continue to be marketed.

added “(d) Negotiation-Eligible drug

added “(1) In general—For purposes of this part, the term negotiation-eligible drug means, with respect to the selected drug publication date with respect to an initial price applicability year, a qualifying single source drug, as defined in subsection (e), that meets any of the following criteria:

added “(A) Covered part D drugs—The drug is among the 125 covered part D drugs (as defined in section 1860D–2(e)) for which there was an estimated greatest net spending under parts C and D of title XVIII, as determined by the Secretary, during the most recent plan year prior to such drug publication date for which data are available.

added “(B) Other drugs—The drug is among the 125 drugs for which there was an estimated greatest net spending in the United States (including the 50 States, the District of Columbia, and the territories of the United States), as determined by the Secretary, during the most recent plan year prior to such drug publication date for which data are available.

added “(C) Insulin—The drug is a qualifying single source drug described in subsection (e)(3).

added “(2) Clarification—In determining whether a qualifying single source drug satisfies any of the criteria described in paragraph (1), the Secretary shall, to the extent practicable, use data that is aggregated across dosage forms and strengths of the drug and not based on the specific formulation or package size or package type of the drug.

added “(3) Publication—Not later than the selected drug publication date with respect to an initial price applicability year, the Secretary shall publish in the Federal Register a list of negotiation-eligible drugs with respect to such selected drug publication date.

added “(e) Qualifying single source drug—For purposes of this part, the term qualifying single source drug means any of the following:

added “(1) Drug products—A drug that—

added “(A) is approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act and continues to be marketed pursuant to such approval; and

added “(B) is not the listed drug for any drug that is approved and continues to be marketed under section 505(j) of such Act.

added “(2) Biological products—A biological product that—

added “(A) is licensed under section 351(a) of the Public Health Service Act, including any product that has been deemed to be licensed under section 351 of such Act pursuant to section 7002(e)(4) of the Biologics Price Competition and Innovation Act of 2009, and continues to be marketed under section 351 of such Act; and

added “(B) is not the reference product for any biological product that is licensed and continues to be marketed under section 351(k) of such Act.

added “(3) Insulin product—Notwithstanding paragraphs (1) and (2), any insulin product that is approved under subsection (c) or (j) of section 505 of the Federal Food, Drug, and Cosmetic Act or licensed under subsection (a) or (k) of section 351 of the Public Health Service Act and continues to be marketed under such section 505 or 351, including any insulin product that has been deemed to be licensed under section 351(a) of the Public Health Service Act pursuant to section 7002(e)(4) of the Biologics Price Competition and Innovation Act of 2009 and continues to be marketed pursuant to such licensure.

added “(f) Information on international drug prices—For purposes of determining which negotiation-eligible drugs to select under subsection (a) and, in the case of such drugs that are selected drugs, to determine the maximum fair price for such a drug and whether such maximum fair price should be renegotiated under section 1194, the Secretary shall use data relating to the AIM price with respect to such drug as available or provided to the Secretary and shall on an ongoing basis request from manufacturers of selected drugs information on the AIM price of such a drug.

added “(g) New-Entrant negotiation-Eligible drugs

added “(1) In general—For purposes of this part, the term “new-entrant negotiation-eligible drug” means, with respect to the selected drug publication date with respect to an initial price applicability year, a qualifying single source drug—

added “(A) that is first approved or licensed, as described in paragraph (1), (2), or (3) of subsection (e), as applicable, during the year preceding such selected drug publication date; and

added “(B) that the Secretary determines under paragraph (2) is likely to be included as a negotiation-eligible drug with respect to the subsequent selected drug publication date.

added “(2) Determination—In the case of a qualifying single source drug that meets the criteria described in subparagraph (A) of paragraph (1), with respect to an initial price applicability year, if the wholesale acquisition cost at which such drug is first marketed in the United States is equal to or greater than the median household income (as determined according to the most recent data collected by the United States Census Bureau), the Secretary shall determine before the selected drug publication date with respect to the initial price applicability year, if the drug is likely to be included as a negotiation-eligible drug with respect to the subsequent selected drug publication date, based on the projected spending under title XVIII or in the United States on such drug. For purposes of this paragraph the term “United States” includes the 50 States, the District of Columbia, and the territories of the United States.

added “(h) Conflict of interest

added “(1) In general—In the case the Inspector General of the Department of Health and Human Services determines the Secretary has a conflict, with respect to a matter described in paragraph (2), the individual described in paragraph (3) shall carry out the duties of the Secretary under this part, with respect to a negotiation-eligible drug, that would otherwise be such a conflict.

added “(2) Matter described—A matter described in this paragraph is—

added “(A) a financial interest (as described in section 2635.402 of title 5, Code of Federal Regulations (except for an interest described in subsection (b)(2)(iv) of such section)) on the date of the selected drug publication date, with respect the price applicability year (as applicable);

added “(B) a personal or business relationship (as described in section 2635.502 of such title) on the date of the selected drug publication date, with respect the price applicability year;

added “(C) employment by a manufacturer of a negotiation-eligible drug during the preceding 10-year period beginning on the date of the selected drug publication date, with respect to each price applicability year; and

added “(D) any other matter the General Counsel determines appropriate.

added “(3) Individual described—An individual described in this paragraph is—

added “(A) the highest-ranking officer or employee of the Department of Health and Human Services (as determined by the organizational chart of the Department) that does not have a conflict under this subsection; and

added “(B) is nominated by the President and confirmed by the Senate with respect to the position.

added “1193. Manufacturer agreements

added “(a) In general—For purposes of section 1191(a)(2), the Secretary shall enter into agreements with manufacturers of selected drugs with respect to a price applicability period, by not later than June 15 following the selected drug publication date with respect to such selected drug, under which—

added “(1) during the voluntary negotiation period for the initial price applicability year for the selected drug, the Secretary and manufacturer, in accordance with section 1194, negotiate to determine (and, by not later than the last date of such period and in accordance with subsection (c), agree to) a maximum fair price for such selected drug of the manufacturer in order to provide access to such price—

added “(A) to fair price eligible individuals who with respect to such drug are described in subparagraph (A) of section 1191(c)(1) and are furnished or dispensed such drug during, subject to subparagraph (2), the price applicability period; and

added “(B) to hospitals, physicians, and other providers of services and suppliers with respect to fair price eligible individuals who with respect to such drug are described in subparagraph (B) of such section and are furnished or administered such drug during, subject to subparagraph (2), the price applicability period;

added “(2) the Secretary and the manufacturer shall, in accordance with a process and during a period specified by the Secretary pursuant to rulemaking, renegotiate (and, by not later than the last date of such period and in accordance with subsection (c), agree to) the maximum fair price for such drug if the Secretary determines that there is a material change in any of the factors described in section 1194(d) relating to the drug, including changes in the AIM price for such drug, in order to provide access to such maximum fair price (as so renegotiated)—

added “(A) to fair price eligible individuals who with respect to such drug are described in subparagraph (A) of section 1191(c)(1) and are furnished or dispensed such drug during any year during the price applicability period (beginning after such renegotiation) with respect to such selected drug; and

added “(B) to hospitals, physicians, and other providers of services and suppliers with respect to fair price eligible individuals who with respect to such drug are described in subparagraph (B) of such section and are furnished or administered such drug during any year described in subparagraph (A);

added “(3) the maximum fair price (including as renegotiated pursuant to paragraph (2)), with respect to such a selected drug, shall be provided to fair price eligible individuals, who with respect to such drug are described in subparagraph (A) of section 1191(c)(1), at the pharmacy or by a mail order service at the point-of-sale of such drug;

added “(4) the manufacturer, subject to subsection (d), submits to the Secretary, in a form and manner specified by the Secretary—

added “(A) for the voluntary negotiation period for the price applicability period (and, if applicable, before any period of renegotiation specified pursuant to paragraph (2)) with respect to such drug all information that the Secretary requires to carry out the negotiation (or renegotiation process) under this part, including information described in section 1192(f) and section 1194(d)(1); and

added “(B) on an ongoing basis, information on changes in prices for such drug that would affect the AIM price for such drug or otherwise provide a basis for renegotiation of the maximum fair price for such drug pursuant to paragraph (2);

added “(5) the manufacturer agrees that in the case the selected drug of a manufacturer is a drug described in subsection (c), the manufacturer will, in accordance with such subsection, make any payment required under such subsection with respect to such drug; and

added “(6) the manufacturer complies with requirements imposed by the Secretary for purposes of administering the program, including with respect to the duties described in section 1196.

added “(b) Agreement in effect until drug is no longer a selected drug—An agreement entered into under this section shall be effective, with respect to a drug, until such drug is no longer considered a selected drug under section 1192(c).

added “(c) Special rule for certain selected drugs without AIM price

added “(1) In general—In the case of a selected drug for which there is no AIM price available with respect to the initial price applicability year for such drug and for which an AIM price becomes available beginning with respect to a subsequent plan year during the price applicability period for such drug, if the Secretary determines that the amount described in paragraph (2)(A) for a unit of such drug is greater than the amount described in paragraph (2)(B) for a unit of such drug, then by not later than one year after the date of such determination, the manufacturer of such selected drug shall pay to the Treasury an amount equal to the product of—

added “(A) the difference between such amount described in paragraph (2)(A) for a unit of such drug and such amount described in paragraph (2)(B) for a unit of such drug; and

added “(B) the number of units of such drug sold in the United States, including the 50 States, the District of Columbia, and the territories of the United States, during the period described in paragraph (2)(B).

added “(2) Amounts described

added “(A) Weighted average price before AIM price available—For purposes of paragraph (1), the amount described in this subparagraph for a selected drug described in such paragraph, is the amount equal to the weighted average manufacturer price (as defined in section 1927(k)(1)) for such dosage strength and form for the drug during the period beginning with the first plan year for which the drug is included on the list of negotiation-eligible drugs published under section 1192(d) and ending with the last plan year during the price applicability period for such drug with respect to which there is no AIM price available for such drug.

added “(B) Amount multiplier after AIM price available—For purposes of paragraph (1), the amount described in this subparagraph for a selected drug described in such paragraph, is the amount equal to 200 percent of the AIM price for such drug with respect to the first plan year during the price applicability period for such drug with respect to which there is an AIM price available for such drug.

added “(d) Confidentiality of information—Information submitted to the Secretary under this part by a manufacturer of a selected drug that is proprietary information of such manufacturer (as determined by the Secretary) may be used only by the Secretary or disclosed to and used by the Comptroller General of the United States or the Medicare Payment Advisory Commission for purposes of carrying out this part.

added “(e) Regulations

added “(1) In general—The Secretary shall, pursuant to rulemaking, specify, in accordance with paragraph (2), the information that must be submitted under subsection (a)(4).

added “(2) Information specified—Information described in paragraph (1), with respect to a selected drug, shall include information on sales of the drug (by the manufacturer of the drug or by another entity under license or other agreement with the manufacturer, with respect to the sales of such drug, regardless of the name under which the drug is sold) in any foreign country that is part of the AIM price. The Secretary shall verify, to the extent practicable, such sales from appropriate officials of the government of the foreign country involved.

added “(f) Compliance with requirements for administration of program—Each manufacturer with an agreement in effect under this section shall comply with requirements imposed by the Secretary or a third party with a contract under section 1196(c)(1), as applicable, for purposes of administering the program.

added “1194. Negotiation and renegotiation process

added “(a) In general—For purposes of this part, under an agreement under section 1193 between the Secretary and a manufacturer of a selected drug, with respect to the period for which such agreement is in effect and in accordance with subsections (b) and (c), the Secretary and the manufacturer—

added “(1) shall during the voluntary negotiation period with respect to the initial price applicability year for such drug, in accordance with this section, negotiate a maximum fair price for such drug for the purpose described in section 1193(a)(1); and

added “(2) as applicable pursuant to section 1193(a)(2) and in accordance with the process specified pursuant to such section, renegotiate such maximum fair price for such drug for the purpose described in such section.

added “(b) Negotiating methodology and objective

added “(1) In general—The Secretary shall develop and use a consistent methodology for negotiations under subsection (a) that, in accordance with paragraph (2) and subject to paragraph (3), achieves the lowest maximum fair price for each selected drug while appropriately rewarding innovation.

added “(2) Prioritizing factors—In considering the factors described in subsection (d) in negotiating (and, as applicable, renegotiating) the maximum fair price for a selected drug, the Secretary shall, to the extent practicable, consider all of the available factors listed but shall prioritize the following factors:

added “(A) Research and development costs—The factor described in paragraph (1)(A) of subsection (d).

added “(B) Market data—The factor described in paragraph (1)(B) of such subsection.

added “(C) Unit costs of production and distribution—The factor described in paragraph (1)(C) of such subsection.

added “(D) Comparison to existing therapeutic alternatives—The factor described in paragraph (2)(A) of such subsection.

added “(3) Requirement

added “(A) In general—In negotiating the maximum fair price of a selected drug, with respect to an initial price applicability year for the selected drug, and, as applicable, in renegotiating the maximum fair price for such drug, with respect to a subsequent year during the price applicability period for such drug, in the case that the manufacturer of the selected drug offers under the negotiation or renegotiation, as applicable, a price for such drug that is not more than the target price described in subparagraph (B) for such drug for the respective year, the Secretary shall agree under such negotiation or renegotiation, respectively, to such offered price as the maximum fair price.

added “(B) Target price

added “(i) In general—Subject to clause (ii), the target price described in this subparagraph for a selected drug with respect to a year, is the average price (which shall be the net average price, if practicable, and volume-weighted, if practicable) for a unit of such drug for sales of such drug, as computed (across different dosage forms and strengths of the drug and not based on the specific formulation or package size or package type of the drug) in the applicable country described in section 1191(c)(3)(B) with respect to such drug that, with respect to such year, has the lowest average price for such drug as compared to the average prices (as so computed) of such drug with respect to such year in the other applicable countries described in such section with respect to such drug.

added “(ii) Selected drugs without AIM price—In applying this paragraph in the case of negotiating the maximum fair price of a selected drug for which there is no AIM price available with respect to the initial price applicability year for such drug, or, as applicable, renegotiating the maximum fair price for such drug with respect to a subsequent year during the price applicability period for such drug before the first plan year for which there is an AIM price available for such drug, the target price described in this subparagraph for such drug and respective year is the amount that is 80 percent of the average manufacturer price (as defined in section 1927(k)(1)) for such drug and year.

added “(4) Annual report—After the completion of each voluntary negotiation period, the Secretary shall submit to Congress a report on the maximum fair prices negotiated (or, as applicable, renegotiated) for such period. Such report shall include information on how such prices so negotiated (or renegotiated) meet the requirements of this part, including the requirements of this subsection.

added “(c) Limitation

added “(1) In general—Subject to paragraph (2), the maximum fair price negotiated (including as renegotiated) under this section for a selected drug, with respect to each plan year during a price applicability period for such drug, shall not exceed 120 percent of the AIM price applicable to such drug with respect to such year.

added “(2) Selected drugs without AIM price—In the case of a selected drug for which there is no AIM price available with respect to the initial price applicability year for such drug, for each plan year during the price applicability period before the first plan year for which there is an AIM price available for such drug, the maximum fair price negotiated (including as renegotiated) under this section for the selected drug shall not exceed the amount equal to 85 percent of the average manufacturer price for the drug with respect to such year.

added “(d) Considerations—For purposes of negotiating and, as applicable, renegotiating (including for purposes of determining whether to renegotiate) the maximum fair price of a selected drug under this part with the manufacturer of the drug, the Secretary, consistent with subsection (b)(2), shall take into consideration the factors described in paragraphs (1), (2), (3), and (5), and may take into consideration the factor described in paragraph (4):

added “(1) Manufacturer-specific information—The following information, including as submitted by the manufacturer:

added “(A) Research and development costs of the manufacturer for the drug and the extent to which the manufacturer has recouped research and development costs.

added “(B) Market data for the drug, including the distribution of sales across different programs and purchasers and projected future revenues for the drug.

added “(C) Unit costs of production and distribution of the drug.

added “(D) Prior Federal financial support for novel therapeutic discovery and development with respect to the drug.

added “(E) Data on patents and on existing and pending exclusivity for the drug.

added “(F) National sales data for the drug.

added “(G) Information on clinical trials for the drug in the United States or in applicable countries described in section 1191(c)(3)(B).

added “(2) Information on alternative products—The following information:

added “(A) The extent to which the drug represents a therapeutic advance as compared to existing therapeutic alternatives and, to the extent such information is available, the costs of such existing therapeutic alternatives.

added “(B) Information on approval by the Food and Drug Administration of alternative drug products.

added “(C) Information on comparative effectiveness analysis for such products, taking into consideration the effects of such products on specific populations, such as individuals with disabilities, the elderly, terminally ill, children, and other patient populations.

added “(3) Foreign sales information—To the extent available on a timely basis, including as provided by a manufacturer of the selected drug or otherwise, information on sales of the selected drug in each of the countries described in section 1191(c)(3)(B).

added “(4) VA drug pricing information—Information disclosed to the Secretary pursuant to subsection (f).

added “(5) Additional information—Information submitted to the Secretary, in accordance with a process specified by the Secretary, by other parties that are affected by the establishment of a maximum fair price for the selected drug.

added “(e) Request for information—For purposes of negotiating and, as applicable, renegotiating (including for purposes of determining whether to renegotiate) the maximum fair price of a selected drug under this part with the manufacturer of the drug, with respect to a price applicability period, and other relevant data for purposes of this section—

added “(1) the Secretary shall, not later than the selected drug publication date with respect to the initial price applicability year of such period, request drug pricing information from the manufacturer of such selected drug, including information described in subsection (d)(1); and

added “(2) by not later than October 1 following the selected drug publication date, the manufacturer of such selected drug shall submit to the Secretary such requested information in such form and manner as the Secretary may require.

added “(f) Disclosure of information—For purposes of this part, the Secretary of Veterans Affairs may disclose to the Secretary of Health and Human Services the price of any negotiation-eligible drug that is purchased pursuant to section 8126 of title 38, United States Code.

added “1195. Publication of maximum fair prices

added “(a) In general—With respect to an initial price applicability year and selected drug with respect to such year, not later than April 1 of the plan year prior to such initial price applicability year, the Secretary shall publish in the Federal Register the maximum fair price for such drug negotiated under this part with the manufacturer of such drug.

added “(b) Updates

added “(1) Subsequent year maximum fair prices—For a selected drug, for each plan year subsequent to the initial price applicability year for such drug with respect to which an agreement for such drug is in effect under section 1193, the Secretary shall publish in the Federal Register—

added “(A) subject to subparagraph (B), the amount equal to the maximum fair price published for such drug for the previous year, increased by the annual percentage increase in the consumer price index for all urban consumers (all items; U.S. city average) as of September of such previous year; or

added “(B) in the case the maximum fair price for such drug was renegotiated, for the first year for which such price as so renegotiated applies, such renegotiated maximum fair price.

added “(2) Prices negotiated after deadline—In the case of a selected drug with respect to an initial price applicability year for which the maximum fair price is determined under this part after the date of publication under this section, the Secretary shall publish such maximum fair price in the Federal Register by not later than 30 days after the date such maximum price is so determined.

added “1196. Administrative duties; coordination provisions

added “(a) Administrative duties

added “(1) In general—For purposes of section 1191, the administrative duties described in this section are the following:

added “(A) The establishment of procedures (including through agreements with manufacturers under this part, contracts with prescription drug plans under part D of title XVIII and MA–PD plans under part C of such title, and agreements under section 1197 with group health plans and health insurance issuers of health insurance coverage offered in the individual or group market) under which the maximum fair price for a selected drug is provided to fair price eligible individuals, who with respect to such drug are described in subparagraph (A) of section 1191(c)(1), at pharmacies or by mail order service at the point-of-sale of the drug for the applicable price period for such drug and providing that such maximum fair price is used for determining cost-sharing under such plans or coverage for the selected drug.

added “(B) The establishment of procedures (including through agreements with manufacturers under this part and contracts with hospitals, physicians, and other providers of services and suppliers and agreements under section 1197 with group health plans and health insurance issuers of health insurance coverage offered in the individual or group market) under which, in the case of a selected drug furnished or administered by such a hospital, physician, or other provider of services or supplier to fair price eligible individuals (who with respect to such drug are described in subparagraph (B) of section 1191(c)(1)), the maximum fair price for the selected drug is provided to such hospitals, physicians, and other providers of services and suppliers (as applicable) with respect to such individuals and providing that such maximum fair price is used for determining cost-sharing under the respective part, plan, or coverage for the selected drug.

added “(C) The establishment of procedures (including through agreements and contracts described in subparagraphs (A) and (B)) to ensure that, not later than 90 days after the dispensing of a selected drug to a fair price eligible individual by a pharmacy or mail order service, the pharmacy or mail order service is reimbursed for an amount equal to the difference between—

added “(i) the lesser of—

added “(I) the wholesale acquisition cost of the drug;

added “(II) the national average drug acquisition cost of the drug; and

added “(III) any other similar determination of pharmacy acquisition costs of the drug, as determined by the Secretary; and

added “(ii) the maximum fair price for the drug.

added “(D) The establishment of procedures to ensure that the maximum fair price for a selected drug is applied before—

added “(i) any coverage or financial assistance under other health benefit plans or programs that provide coverage or financial assistance for the purchase or provision of prescription drug coverage on behalf of fair price eligible individuals as the Secretary may specify; and

added “(ii) any other discounts.

added “(E) The establishment of procedures to enter into appropriate agreements and protocols for the ongoing computation of AIM prices for selected drugs, including, to the extent possible, to compute the AIM price for selected drugs and including by providing that the manufacturer of such a selected drug should provide information for such computation not later than 3 months after the first date of the voluntary negotiation period for such selected drug.

added “(F) The establishment of procedures to compute and apply the maximum fair price across different strengths and dosage forms of a selected drug and not based on the specific formulation or package size or package type of the drug.

added “(G) The establishment of procedures to negotiate and apply the maximum fair price in a manner that does not include any dispensing or similar fee.

added “(H) The establishment of procedures to carry out the provisions of this part, as applicable, with respect to—

added “(i) fair price eligible individuals who are enrolled under a prescription drug plan under part D of title XVIII or an MA–PD plan under part C of such title;

added “(ii) fair price eligible individuals who are enrolled under a group health plan or health insurance coverage offered by a health insurance issuer in the individual or group market with respect to which there is an agreement in effect under section 1197; and

added “(iii) fair price eligible individuals who are entitled to benefits under part A of title XVIII or enrolled under part B of such title.

added “(I) The establishment of a negotiation process and renegotiation process in accordance with section 1194, including a process for acquiring information described in subsection (d) of such section and determining amounts described in subsection (b) of such section.

added “(J) The provision of a reasonable dispute resolution mechanism to resolve disagreements between manufacturers, fair price eligible individuals, and the third party with a contract under subsection (c)(1).

added “(2) Monitoring compliance

added “(A) In general—The Secretary shall monitor compliance by a manufacturer with the terms of an agreement under section 1193, including by establishing a mechanism through which violations of such terms may be reported.

added “(B) Notification—If a third party with a contract under subsection (c)(1) determines that the manufacturer is not in compliance with such agreement, the third party shall notify the Secretary of such noncompliance for appropriate enforcement under section 4192 of the Internal Revenue Code of 1986 or section 1198, as applicable.

added “(b) Collection of data

added “(1) From prescription drug plans and MA–PD plans—The Secretary may collect appropriate data from prescription drug plans under part D of title XVIII and MA–PD plans under part C of such title in a timeframe that allows for maximum fair prices to be provided under this part for selected drugs.

added “(2) From health plans—The Secretary may collect appropriate data from group health plans or health insurance issuers offering group or individual health insurance coverage in a timeframe that allows for maximum fair prices to be provided under this part for selected drugs.

added “(3) Coordination of data collection—To the extent feasible, as determined by the Secretary, the Secretary shall ensure that data collected pursuant to this subsection is coordinated with, and not duplicative of, other Federal data collection efforts.

added “(c) Contract with third parties

added “(1) In general—The Secretary may enter into a contract with 1 or more third parties to administer the requirements established by the Secretary in order to carry out this part. At a minimum, the contract with a third party under the preceding sentence shall require that the third party—

added “(A) receive and transmit information between the Secretary, manufacturers, and other individuals or entities the Secretary determines appropriate;

added “(B) receive, distribute, or facilitate the distribution of funds of manufacturers to appropriate individuals or entities in order to meet the obligations of manufacturers under agreements under this part;

added “(C) provide adequate and timely information to manufacturers, consistent with the agreement with the manufacturer under this part, as necessary for the manufacturer to fulfill its obligations under this part; and

added “(D) permit manufacturers to conduct periodic audits, directly or through contracts, of the data and information used by the third party to determine discounts for applicable drugs of the manufacturer under the program.

added “(2) Performance requirements—The Secretary shall establish performance requirements for a third party with a contract under paragraph (1) and safeguards to protect the independence and integrity of the activities carried out by the third party under the program under this part.

added “1197. Voluntary participation by other health plans

added “(a) Agreement to participate under program

added “(1) In general—Subject to paragraph (2), under the program under this part the Secretary shall be treated as having in effect an agreement with a group health plan or health insurance issuer offering group or individual health insurance coverage (as such terms are defined in section 2791 of the Public Health Service Act), with respect to a price applicability period and a selected drug with respect to such period—

added “(A) with respect to such selected drug furnished or dispensed at a pharmacy or by mail order service if coverage is provided under such plan or coverage during such period for such selected drug as so furnished or dispensed; and

added “(B) with respect to such selected drug furnished or administered by a hospital, physician, or other provider of services or supplier if coverage is provided under such plan or coverage during such period for such selected drug as so furnished or administered.

added “(2) Opting out of agreement—The Secretary shall not be treated as having in effect an agreement under the program under this part with a group health plan or health insurance issuer offering group or individual health insurance coverage with respect to a price applicability period and a selected drug with respect to such period if such a plan or issuer affirmatively elects, through a process specified by the Secretary, not to participate under the program with respect to such period and drug.

added “(b) Publication of election—With respect to each price applicability period and each selected drug with respect to such period, the Secretary and the Secretary of Labor and the Secretary of the Treasury, as applicable, shall make public a list of each group health plan and each health insurance issuer offering group or individual health insurance coverage, with respect to which coverage is provided under such plan or coverage for such drug, that has elected under subsection (a) not to participate under the program with respect to such period and drug.

added “1198. Civil monetary penalty

added “(a) Violations relating To offering of maximum fair price—Any manufacturer of a selected drug that has entered into an agreement under section 1193, with respect to a plan year during the price applicability period for such drug, that does not provide access to a price that is not more than the maximum fair price (or a lesser price) for such drug for such year—

added “(1) to a fair price eligible individual who with respect to such drug is described in subparagraph (A) of section 1191(c)(1) and who is furnished or dispensed such drug during such year; or

added “(2) to a hospital, physician, or other provider of services or supplier with respect to fair price eligible individuals who with respect to such drug is described in subparagraph (B) of such section and is furnished or administered such drug by such hospital, physician, or provider or supplier during such year;

added “(b) Violations of certain terms of agreement—Any manufacturer of a selected drug that has entered into an agreement under section 1193, with respect to a plan year during the price applicability period for such drug, that is in violation of a requirement imposed pursuant to section 1193(a)(6) shall be subject to a civil monetary penalty of not more than $1,000,000 for each such violation.

added “(c) Application—The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil monetary penalty under this section in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).

added “1199. Miscellaneous provisions

added “(a) Paperwork Reduction Act—Chapter 35 of title 44, United States Code, shall not apply to data collected under this part.

added “(b) National Academy of Medicine study—Not later than December 31, 2025, the National Academy of Medicine shall conduct a study, and submit to Congress a report, on recommendations for improvements to the program under this part, including the determination of the limits applied under section 1194(c).

added “(c) MedPAC study—Not later than December 31, 2025, the Medicare Payment Advisory Commission shall conduct a study, and submit to Congress a report, on the program under this part with respect to the Medicare program under title XVIII, including with respect to the effect of the program on individuals entitled to benefits or enrolled under such title.

added “(d) Limitation on judicial review—The following shall not be subject to judicial review:

added “(1) The selection of drugs for publication under section 1192(a).

added “(2) The determination of whether a drug is a negotiation-eligible drug under section 1192(d).

added “(3) The determination of the maximum fair price of a selected drug under section 1194.

added “(4) The determination of units of a drug for purposes of section 1191(c)(3).

added “(e) Coordination—In carrying out this part with respect to group health plans or health insurance coverage offered in the group market that are subject to oversight by the Secretary of Labor or the Secretary of the Treasury, the Secretary of Health and Human Services shall coordinate with such respective Secretary.

added “(f) Data sharing—The Secretary shall share with the Secretary of the Treasury such information as is necessary to determine the tax imposed by section 4192 of the Internal Revenue Code of 1986.

added “(g) GAO study—Not later than December 31, 2025, the Comptroller General of the United States shall conduct a study of, and submit to Congress a report on, the implementation of the Fair Price Negotiation Program under this part.”

added “(D) Application of maximum fair price for selected drugs—In applying this section, in the case of a covered part D drug that is a selected drug (as defined in section 1192(c)), with respect to a price applicability period (as defined in section 1191(b)(2)), the negotiated prices used for payment (as described in this subsection) shall be the maximum fair price (as defined in section 1191(c)(2)) for such drug and for each plan year during such period.”

added “(8) Provision of information related to maximum fair prices—Each contract entered into with a PDP sponsor under this part with respect to a prescription drug plan offered by such sponsor shall require the sponsor to provide information to the Secretary as requested by the Secretary in accordance with section 1196(b).”

added “(E) Provision of information related to maximum fair prices—Section 1860D–12(b)(8).”

added “2729A. Fair Price Negotiation Program and application of maximum fair prices

added “(a) In general—In the case of a group health plan or health insurance issuer offering group or individual health insurance coverage that is treated under section 1197 of the Social Security Act as having in effect an agreement with the Secretary under the Fair Price Negotiation Program under part E of title XI of such Act, with respect to a price applicability period (as defined in section 1191(b) of such Act) and a selected drug (as defined in section 1192(c) of such Act) with respect to such period with respect to which coverage is provided under such plan or coverage—

added “(1) the provisions of such part shall apply—

added “(A) if coverage of such selected drug is provided under such plan or coverage if the drug is furnished or dispensed at a pharmacy or by a mail order service, to the plans or coverage offered by such plan or issuer, and to the individuals enrolled under such plans or coverage, during such period, with respect to such selected drug, in the same manner as such provisions apply to prescription drug plans and MA–PD plans, and to individuals enrolled under such prescription drug plans and MA–PD plans during such period; and

added “(B) if coverage of such selected drug is provided under such plan or coverage if the drug is furnished or administered by a hospital, physician, or other provider of services or supplier, to the plans or coverage offered by such plan or issuers, to the individuals enrolled under such plans or coverage, and to hospitals, physicians, and other providers of services and suppliers during such period, with respect to such drug in the same manner as such provisions apply to the Secretary, to individuals entitled to benefits under part A of title XVIII or enrolled under part B of such title, and to hospitals, physicians, and other providers and suppliers participating under title XVIII during such period;

added “(2) the plan or issuer shall apply any cost-sharing responsibilities under such plan or coverage, with respect to such selected drug, by substituting an amount not more than the maximum fair price negotiated under such part E of title XI for such drug in lieu of the drug price upon which the cost-sharing would have otherwise applied, and such cost-sharing responsibilities with respect to such selected drug may not exceed such maximum fair price; and

added “(3) the Secretary shall apply the provisions of such part E to such plan, issuer, and coverage, such individuals so enrolled in such plans and coverage, and such hospitals, physicians, and other providers and suppliers participating in such plans and coverage.

added “(b) Notification regarding nonparticipation in Fair Price Negotiation Program—A group health plan or a health insurance issuer offering group or individual health insurance coverage shall publicly disclose in a manner and in accordance with a process specified by the Secretary any election made under section 1197 of the Social Security Act by the plan or issuer to not participate in the Fair Price Negotiation Program under part E of title XI of such Act with respect to a selected drug (as defined in section 1192(c) of such Act) for which coverage is provided under such plan or coverage before the beginning of the plan year for which such election was made.”

added “716. Fair Price Negotiation Program and application of maximum fair prices

added “(a) In general—In the case of a group health plan or health insurance issuer offering group health insurance coverage that is treated under section 1197 of the Social Security Act as having in effect an agreement with the Secretary under the Fair Price Negotiation Program under part E of title XI of such Act, with respect to a price applicability period (as defined in section 1191(b) of such Act) and a selected drug (as defined in section 1192(c) of such Act) with respect to such period with respect to which coverage is provided under such plan or coverage—

added “(1) the provisions of such part shall apply, as applicable—

added “(A) if coverage of such selected drug is provided under such plan or coverage if the drug is furnished or dispensed at a pharmacy or by a mail order service, to the plans or coverage offered by such plan or issuer, and to the individuals enrolled under such plans or coverage, during such period, with respect to such selected drug, in the same manner as such provisions apply to prescription drug plans and MA–PD plans, and to individuals enrolled under such prescription drug plans and MA–PD plans during such period; and

added “(B) if coverage of such selected drug is provided under such plan or coverage if the drug is furnished or administered by a hospital, physician, or other provider of services or supplier, to the plans or coverage offered by such plan or issuers, to the individuals enrolled under such plans or coverage, and to hospitals, physicians, and other providers of services and suppliers during such period, with respect to such drug in the same manner as such provisions apply to the Secretary, to individuals entitled to benefits under part A of title XVIII or enrolled under part B of such title, and to hospitals, physicians, and other providers and suppliers participating under title XVIII during such period;

added “(2) the plan or issuer shall apply any cost-sharing responsibilities under such plan or coverage, with respect to such selected drug, by substituting an amount not more than the maximum fair price negotiated under such part E of title XI for such drug in lieu of the drug price upon which the cost-sharing would have otherwise applied, and such cost-sharing responsibilities with respect to such selected drug may not exceed such maximum fair price; and

added “(3) the Secretary shall apply the provisions of such part E to such plan, issuer, and coverage, and such individuals so enrolled in such plans.

added “(b) Notification regarding nonparticipation in Fair Price Negotiation Program—A group health plan or a health insurance issuer offering group health insurance coverage shall publicly disclose in a manner and in accordance with a process specified by the Secretary any election made under section 1197 of the Social Security Act by the plan or issuer to not participate in the Fair Price Negotiation Program under part E of title XI of such Act with respect to a selected drug (as defined in section 1192(c) of such Act) for which coverage is provided under such plan or coverage before the beginning of the plan year for which such election was made.”

added “9816. Fair Price Negotiation Program and application of maximum fair prices

added “(a) In general—In the case of a group health plan that is treated under section 1197 of the Social Security Act as having in effect an agreement with the Secretary under the Fair Price Negotiation Program under part E of title XI of such Act, with respect to a price applicability period (as defined in section 1191(b) of such Act) and a selected drug (as defined in section 1192(c) of such Act) with respect to such period with respect to which coverage is provided under such plan—

added “(1) the provisions of such part shall apply, as applicable—

added “(A) if coverage of such selected drug is provided under such plan if the drug is furnished or dispensed at a pharmacy or by a mail order service, to the plan, and to the individuals enrolled under such plan during such period, with respect to such selected drug, in the same manner as such provisions apply to prescription drug plans and MA–PD plans, and to individuals enrolled under such prescription drug plans and MA–PD plans during such period; and

added “(B) if coverage of such selected drug is provided under such plan if the drug is furnished or administered by a hospital, physician, or other provider of services or supplier, to the plan, to the individuals enrolled under such plan, and to hospitals, physicians, and other providers of services and suppliers during such period, with respect to such drug in the same manner as such provisions apply to the Secretary, to individuals entitled to benefits under part A of title XVIII or enrolled under part B of such title, and to hospitals, physicians, and other providers and suppliers participating under title XVIII during such period;

added “(2) the plan shall apply any cost-sharing responsibilities under such plan, with respect to such selected drug, by substituting an amount not more than the maximum fair price negotiated under such part E of title XI for such drug in lieu of the drug price upon which the cost-sharing would have otherwise applied, and such cost-sharing responsibilities with respect to such selected drug may not exceed such maximum fair price; and

added “(3) the Secretary shall apply the provisions of such part E to such plan and such individuals so enrolled in such plan.

added “(b) Notification regarding nonparticipation in Fair Price Negotiation Program—A group health plan shall publicly disclose in a manner and in accordance with a process specified by the Secretary any election made under section 1197 of the Social Security Act by the plan to not participate in the Fair Price Negotiation Program under part E of title XI of such Act with respect to a selected drug (as defined in section 1192(c) of such Act) for which coverage is provided under such plan before the beginning of the plan year for which such election was made.”

added “(V) in the case of a rebate period and a covered outpatient drug that is a selected drug (as defined in section 1192(c)) during such rebate period, shall be inclusive of the price for such drug made available from the manufacturer during the rebate period by reason of application of part E of title XI to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity within the United States.”

added “(iii) Clarification—Notwithstanding clause (i), in the case of a rebate period and a covered outpatient drug that is a selected drug (as defined in section 1192(c)) during such rebate period, any reduction in price paid during the rebate period to the manufacturer for the drug by a wholesaler or retail community pharmacy described in subparagraph (A) by reason of application of part E of title XI shall be included in the average manufacturer price for the covered outpatient drug.”

added “(p) A contract may not be made or a plan approved under this chapter with any carrier that has affirmatively elected, pursuant to section 1197 of the Social Security Act, not to participate in the Fair Price Negotiation Program established under section 1191 of such Act for any selected drug (as that term is defined in section 1192(c) of such Act).”

added “(j)

added “(1) In the case of a covered drug that is a selected drug, for any year during the price applicability period for such drug, if the Secretary determines that the maximum fair price of such drug for such year is less than the price for such drug otherwise in effect pursuant to this section (including after application of any reduction under subsection (a)(2) and any discount under subsection (c)), at the option of the Secretary, in lieu of the maximum price (determined after application of the reduction under subsection (a)(2) and any discount under subsection (c), as applicable) that would be permitted to be charged during such year for such drug pursuant to this section without application of this subsection, the maximum price permitted to be charged during such year for such drug pursuant to this section shall be such maximum fair price for such drug and year.

added “(2) For purposes of this subsection:

added “(A) The term “maximum fair price” means, with respect to a selected drug and year during the price applicability period for such drug, the maximum fair price (as defined in section 1191(c)(2) of the Social Security Act) for such drug and year.

added “(B) The term “negotiation eligible drug” has the meaning given such term in section 1192(d)(1) of the Social Security Act.

added “(C) The term “price applicability period” has, with respect to a selected drug, the meaning given such term in section 1191(b)(2) of such Act.

added “(D) The term “selected drug” means, with respect to a year, a drug that is a selected drug under section 1192(c) of such Act for such year.”

added “4192. Selected drugs during noncompliance periods

added “(a) In general—There is hereby imposed on the sale by the manufacturer, producer, or importer of any selected drug during a day described in subsection (b) a tax in an amount such that the applicable percentage is equal to the ratio of—

added “(1) such tax, divided by

added “(2) the sum of such tax and the price for which so sold.

added “(b) Noncompliance periods—A day is described in this subsection with respect to a selected drug if it is a day during one of the following periods:

added “(1) The period beginning on the June 16th immediately following the selected drug publication date and ending on the first date during which the manufacturer of the drug has in place an agreement described in subsection (a) of section 1193 of the Social Security Act with respect to such drug.

added “(2) The period beginning on the April 1st immediately following the June 16th described in paragraph (1) and ending on the first date during which the manufacturer of the drug has agreed to a maximum fair price under such agreement.

added “(3) In the case of a selected drug with respect to which the Secretary of Health and Human Services has specified a renegotiation period under such agreement, the period beginning on the first date after the last date of such renegotiation period and ending on the first date during which the manufacturer of the drug has agreed to a renegotiated maximum fair price under such agreement.

added “(4) With respect to information that is required to be submitted to the Secretary of Health and Human Services under such agreement, the period beginning on the date on which such Secretary certifies that such information is overdue and ending on the date that such information is so submitted.

added “(5) In the case of a selected drug with respect to which a payment is due under subsection (c) of such section 1193, the period beginning on the date on which the Secretary of Health and Human Services certifies that such payment is overdue and ending on the date that such payment is made in full.

added “(c) Applicable percentage—For purposes of this section, the term applicable percentage means—

added “(1) in the case of sales of a selected drug during the first 90 days described in subsection (b) with respect to such drug, 65 percent,

added “(2) in the case of sales of such drug during the 91st day through the 180th day described in subsection (b) with respect to such drug, 75 percent,

added “(3) in the case of sales of such drug during the 181st day through the 270th day described in subsection (b) with respect to such drug, 85 percent, and

added “(4) in the case of sales of such drug during any subsequent day, 95 percent.

added “(d) Selected drug—For purposes of this section—

added “(1) In general—The term “selected drug” means any selected drug (within the meaning of section 1192 of the Social Security Act) which is manufactured or produced in the United States or entered into the United States for consumption, use, or warehousing.

added “(2) United States—The term “United States” has the meaning given such term by section 4612(a)(4).

added “(3) Coordination with rules for possessions of the United States—Rules similar to the rules of paragraphs (2) and (4) of section 4132(c) shall apply for purposes of this section.

added “(e) Other definitions—For purposes of this section, the terms selected drug publication date and maximum fair price have the meaning given such terms in section 1191 of the Social Security Act.

added “(f) Anti-Abuse rule—In the case of a sale which was timed for the purpose of avoiding the tax imposed by this section, the Secretary may treat such sale as occurring during a day described in subsection (b).”